Homeware retailers hardest hit by recession
Over a third of the total administrations during the last quarter represent homeware retailers, according to The Business, Innovation and Skills (BIS) government department.
Those include such companies as Focus DIY, Habitat and Homeform.
Retailers in this area of the industry have been hardest hit due to falling consumer spending.
However, fears of insolvency are not restricted to one sector of retail, companies across the industry are worrying about their financial situation and the banks willingness to help them.
According to research from business advisors Grant Thornton UK, almost a quarter of retailers believe that the financing environment will deteriorate over the coming year while a further 30 per cent see no likely improvement.
In total 60 per cent of retail respondents believe banks are being more conservative than 12 to 18 months ago, with a full 90 per cent saying their cash flow was being scrutinised by banks during negotiations compared to 66 per cent across other industries.
Tim Hansell, Corporate Finance Director at Grant Thornton, concluded: “Lenders are however still cautious about providing leverage to ‘new to bank’ retail customers, and leverage multiples in retail/online transactions continue to be conservative, particularly where the off balance sheet rent roll is significant.”
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